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SIMPLe IRA compensation


Guest Lil Anderson
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Guest Lil Anderson

Does anyone know if a pastor can make a SIMPLE IRA contribution based on income reveiced as a housing allowance?

Thank you for your help.

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Minister’s housing. The rental value of a home or a housing allowance provided to a minister as part of the minister’s pay generally is not subject to income tax but included in net earnings from self-employment. For plan purposes, compensation goes not generally include amount excluded from income. You must also examine closely whether the individual is an employee of an organization or truly self-employed (and to what extent). Fees, tips, and other amounts received from the congregation for services may generally be treated as compensation (earned income) for plan purposes.

See also IRS Publications 517 (discussing the taxation of housing allowances, at page 8) and 590 (discussing what is not compensation, at page 8). Both Publications are attached. Hope this helps.

p590.pdf

p517.pdf

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Guest Lil Anderson
Minister’s housing. The rental value of a home or a housing allowance provided to a minister as part of the minister’s pay generally is not subject to income tax but included in net earnings from self-employment. For plan purposes, compensation goes not generally include amount excluded from income. You must also examine closely whether the individual is an employee of an organization or truly self-employed (and to what extent). Fees, tips, and other amounts received from the congregation for services may generally be treated as compensation (earned income) for plan purposes.

See also IRS Publications 517 (discussing the taxation of housing allowances, at page 8) and 590 (discussing what is not compensation, at page 8). Both Publications are attached. Hope this helps.

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